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The Warsaw Voice » Special Sections » January 26, 2012
Special Section: Education
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Universities Must Take Bold Action
January 26, 2012   
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Will current market economy mechanisms prove enough in the face of crisis?
They should. The most important thing to remember is that we should not interfere with the market-based system, which by itself will best deal with all kinds of crises. The phenomenon of a crisis basically signifies that there is an imbalance somewhere in the system. In most cases it will be on the supply side, which leads to overproduction. If there are too many goods in the economy, businesses will not be able to sell all of their products and as a result will eventually face a need to reduce the number of employees. As the unemployment rate goes up, consumption decreases and therefore entrepreneurs face even more difficulties with their sales. This mechanism takes on more intensity until balance is restored, i.e. the surplus goods are sold out. Then a vacuum appears on the market due to insufficient production (no more surplus of goods) and then businesses increase employment.

What does the crisis mean to an average citizen? If you are an entrepreneur, your turnover is lower and you need to look for cost cuts, which includes letting some staff go. If you are not a businessman, you are afraid of unemployment and make savings in your household budget. It can be thus inferred that the problem in a time of crisis is unemployment.

If a student or a passer-by in the street is asked who is responsible for reducing unemployment, the answer will always be: the government. This, however, is not entirely true. It is the unemployed who are responsible for reducing unemployment. The government can only support them. When the crisis comes, unemployment is cyclical in nature, and entrepreneurs lay off the weakest and the least experienced—which means the youngest staff.

The best mechanism to fight the crisis lies in the attitude of labor market participants, specifically an increase in labor productivity, raising skills, internationalization of competences and development of entrepreneurial spirit. At this point it is essential for institutions shaping these factors, i.e. universities, to take bold action.

In these times of decreasing enrollment, when some universities fail to attract students, the most successful are well-established and renowned institutions preparing efficient market participants. Students of graduate programs offered by Clark University and the University of Management study modern specializations in their Master’s and MBA programs and then find employment both in Poland and abroad. Here no one talks about the crisis and employment problems of young people, which seems the best response to the crisis.

Łukasz Prysiński, PhD, MBA Program Director, University of Management, Clark University
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